Benjamin Domenech: Will Obama delay Obamacare?

U.S. President Barack Obama pauses as he speaks during an announcement on gun reform in the Brady Press Briefing Room of the White House December 19, 2012 in Washington, DC. President Obama announced that he is making an administration-wide effort to solve gun violence and has tapped Vice President Joseph Biden to lead the effort in the wake of the Sandy Hook Elementary School shooting in Newtown, Connecticut. GETTY IMAGES

As the fiscal cliff discussions in Washington move forward, don't be surprised if you soon hear about President Barack Obama requesting an extension on his signature legislative achievement. It turns out the Obama administration, already well behind schedule in implementing the president's namesake health care law, may want to delay its implementation even further.

The cause is a bipartisan group of governors in more than 20 states who have declined to implement the state-based versions of insurance exchanges mandated by Obama's law. Instead, they'll leave that to the federal government to do, which is likely to turn into an expensive bureaucratic mess.

So why is it that the governors of Alabama, Alaska, Arizona, Georgia, Indiana, Kansas, Louisiana, Maine, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Virginia, Wisconsin, and Wyoming have all said no to a state-implemented health insurance exchange? In part, it's because even if they wanted to implement one, they understand it's a massive project that won't lower health insurance costs and is certain to cost the states' taxpayers.

Implementation of the exchanges was already behind schedule. Even in the handful of states that agreed on implementation, few steps were taken beyond committee meetings and hiring consultants (on the taxpayer dime of course) before the November election. The rush is on in these states to get the exchanges ready by October of next year. In states where even fewer steps have been taken, the projects will be even more half-baked. Even in the District of Columbia, where no state government means bureaucrats have run the show without interference from the beginning, the board charged with creating the exchange expects to come in behind schedule, describing the process as one of the biggest bureaucratic challenges they've faced. It requires information-sharing throughout the government, determining eligibility and subsidy amounts within systems that have never interfaced before.

In states that choose to implement this system, it's going to cost them, in the form of higher taxes, such as Oregon's tax of up to 5 percent on insurance premiums. And for that cost, the states get little power and a lot of responsibility. The final authority for all significant decisions about the exchanges rests with Washington, D.C. Why would any rational politician want to own politically the creation of a new bureaucracy that requires higher taxes to implement a program where you have little ability to change what it does to meet the needs of your citizens?

Obama administration officials are desperate to meet the deadlines because they know implementation will be very difficult, if not impossible. They've kicked the can down the road again and again, with vague rules and regulations that raise more questions than they answer. In states that won't comply, health care bureaucrats will have to handle the creation of two federal exchanges – one for individuals, one for small businesses – an extremely difficult process.

All along the Obama administration has clearly been fairly nervous about this aspect of the process – it wants to be able to spread the blame around to state governments if the whole system comes crashing down.

Here's where the motivation for delay comes in. The implementation phase of Obama's exchanges will likely make for some interesting reactions in 2014, an election year and the first time when most people will have direct experience with Obama's health care law. The public's reaction could be significant for the Democrats' political prospects. If the system isn't ready, some Hill Democrats are murmuring, better to shift it to 2015 and take it off the table for a year.

If the president requests this delay on his signature legislation, it's proof that criticisms of the law were correct. Americans aren't asking very much of the liberalism that won the day in November; they're just trusting the current government's policies to work. They may have to wait another year to find out.

Benjamin Domenech is a research fellow at The Heartland Institute.

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